Union Financial Disclosure
Posted on June 22, 2008 at 11:18 pm by WTH
-By David Denholm
Central Labor Bodies: Organized Labor’s Political Money Black Hole
In 1959, in response to hearing revealing widespread labor union corruption and racketeering, Congress enacted the Labor-Management Reporting and Disclosure Act, which, among other things, requires labor unions to file financial reports with the U.S. Department of Labor.
The idea, at least in theory, was that if union members had access to information about their union’s finances they could identify and fight corruption. There were two problems with this. First, even though the unions filed the reports they were for all practical purposes inaccessible to union members. Secondly, the information on the reports was too general to allow anyone to identify corruption. It wasn’t uncommon for unions to lump millions, sometimes tens of millions, of dollars into a single category of “other expenses” with no further explanation.
This situation existed for more than forty years until, to her great credit, Secretary of Labor Elaine Chao began posting the financial disclosure forms on the Internet making them readily available to union members and anyone else who was interested. She then took the additional step of reforming the regulations for these filing to require meaningful information. The new regulations are not everything that everyone wanted but they are a huge improvement over the previous ones and, naturally, were resisted every step of the way by union officials. Those reforms are now in place and within the next few months reports will become available that will give union member much more detailed information about what their unions are doing with their dues. Is it any wonder organized labor hates the Bush Administration?
So far so good but the recent controversy about the Change To Win coalitions split from the AFL-CIO and the role of unions in state and central labor bodies has revealed a loophole in the law big enough for a Teamster to drive a Mack truck through.
The definition of labor organization in the LMRDA excludes state and local labor federations. As a result these bodies are exempt from the requirement of filing financial disclosure reports.
Does this matter? You bet it does! The AFL-CIO describes these central bodies as “the backbone of our grassroots political efforts.” It also says that “They provide crucial support to affiliated unions in organizing campaigns and contract fights” and “have a primary responsibility for carrying out the programs of the AFL-CIO.” Other labor experts and commentators have said that central bodies “are labor’s most important organizations. They conduct the major economic and political campaigns of the labor movement” and that they “do most of the heavy lifting during elections.”
In short the law intended to prevent union corruption through financial disclosure completely misses the mark when it comes to dealing with these central bodies that are “the backbone” of the union movement and do the “heavy lifting.”
These central labor bodies are funded by dues dollars but all that shows up on the local union’s financial disclosure report is a lump sum payment for “per capita tax.” You can’t tell from the reports how much of the per capita is going to the national union and how much to the central labor bodies. They are a virtual black hole for union dues. Once the money goes off the local union’s books it, for all practical purposes, disappears from view.
There is a labor council in every state and literally hundreds of local labor councils. These central bodies are collecting millions of dollars derived from union dues but you can read the financial reports filed by local unions and not learn how much was given to the central bodies. And, since the central bodies don’t file reports you can’t tell what was done with it.. The money just goes off the radar screen.
This is a loophole that should never have been created and it certainly ought to be closed at once. This is more important than ever now because at its 2005 Convention the AFL-CIO resolved to “promote full affiliation and funding for state and local labor movements by affiliated unions.” In short, part of the AFL-CIO’s recovery plan is to make support for the central bodies mandatory. This will increase the amount of union dues going into the black hole that does most of organized labor’s “heavy lifting” during elections.
